tv Street Signs CNBC May 17, 2019 4:00am-5:00am EDT
. happy friday and welcome to "street signs. >> these are your headlines. we're both in london >> the dow on pace for its losing streak amid ongoing trade tensions the dutch finance minister tells cnbc no one will win >> it is very important to make sure we avoid any type of trade wars for the simple reason it is lose/lose. it is the interest of the european union but of all the
other economic walks around the globe to make sure we're pushing multilateralism. easy jet trades near the top of the europe 600 despite a wider loss and it's warning that brexit uncertainty could soften revenues >> the competitive environment last year was very benign and that carried into the q3 3% more customers booked through us this summer, but there is an effect on the environment. the shine comes off after the swiss luxury giant's net profit misses expectations despite a big gain from its acquisition. and a fresh order for delivery helps eat into its rivals in the food delivery sector as amazon leads to invest $575 million in the uk group
well, it is friday so that's a good thing this week has been dominated by what i would say are the three t's. we talked trade, tariffs, and technology of course we talked president trump as well. that's the fourth "t." you can see behind he there is a lot of red on the european ve l screen again, there's a lot of fear that the trade talks between the u.s. and china are not yielding anything positive at this point in time. and obviously there are the developments overnight that the u.s. will be banning huawei from working with u.s. technology firms. so that's not a good signal either and certainly chinese markets did not take it well this is the picture for european equities this morning. we're down about 0.4% already. one of the sectors leading decline today, you guessed it.
autos. which is interesting price action over the last couple of days you would think with reports that the auto tariffs decision being delayed would be a positive thing for that sector unfortunately, that hasn't appeared to be the case. autos are really getting hit today. so there is a lot of red on the green. but speaking of european markets for the week, it was a tumultuous training week surprisingly many are ending in positive territory very different than in the u.s. and asia the ftse up 1.7% surprising again where we found there would be another meaningful vote. and there's still no certainty about the uk's future relationship with the eu but the ftse is up this week the dax up 1.47%
the tech sector got hit earlier in the week. for the week we're up 1.5 percentage points. and the swiss index the safety index isup 1.6%. but all eyes on the u.s. as i mentioned. lots of volatility a week ago today is when the tariffs went up on the chinese goods going into this week on monday china retaliated and it's been a week of up and downs for u.s. equities. by the end of it, we are ending slightly in the red. just to give you a bit of context, this is the first four-week losing streak for the dow since 2016 so not a pretty picture if you look at -- if you zoom out a little bit in the price action over the last couple of weeks. this is how u.s. indices have performed. obviously tech sector is the one everyone has been focused on some of the big names there like apple also right in the middle of this trade war narrative.
nasdaq this week with down a fraction the quarter of a percentage point but that is u.s. tech. let's look at how chinese tech performed. not so pretty. that is a. picture of the shenzhen. look at this chart over here big drop in the last couple of sessions again, this is the shenzhen. i started off talking about this on the news that u.s. will be banning huawei from working with u.s. companies clearly this has effects on companies within china as well this index hasn't performed well in the last 24 hours a lot of volatility there and questions whether or not the intention is to get a deal over the finish line. looks as though the next timeline for investors could be at the sidelines for the g20 summit and that is not until june so we still got a lot of waiting time it doesn't appear as though investors are liking the fact we're waiting and the rhetoric keeps declining. but that is the picture for
overall markets this week. a lot of focus still on the tariffs. >> well, we're talking about tariffs. tonight marks the deadline for the u.s. government to decide whether it will impose tariffs on the european auto sector. sources have told cnbc a decision will be delayed news that officials in brussels now down welcome dutch minister said it's hard to avoid a trade war between the european union and the united states. >> in general terms i can say i think it is very important to make sure we avoid any type of trade wars for the simple reason that it is lose/lose it is in the general interest. it is in the interest of the european union but also the other economic blocs around the globe to make sure we keep pushing multi-lateralism and make sure there is free trade. because it is in our joint interest >> and our cnbc colleague in brussels has been speaking to other finance ministers across
the trading bloc to get views on the tensions causing so much uncertainty. >> the longer he postpone it, the more we can work to get it off the table anyway the i didn't say what was realist. i said what we ought to do and we ought to do that if we want to create jobs. if we want to give opportunities, we should make a free trade agreement but you know president trump better than i do so it is difficult for us to see a way forward. >> for a very good development of economy, it is important that we increase trade and not increase new barriers. so it's a very good message that there is now the chance for continued talks for finding solutions and anyone is willing to be successful with that and if we understand what is the problem for world economy at this moment, we know that this is because of man-made problems.
so there is trade tensions all over the globe and if they would be solved, this would have a big impact on growth >> i think that we should avoid any kind of sanctions, tariffs, and trade war. entering into any trade war would have a negative effect we have to avoid going into sanctions. switching to another top story today. amazon has an appetite for food delivery firms the u.s. tech titan will lead a $575 million start-up into deliveroo. they have raised more than $1.5 billion in funding in total
since inception. as ceo and founder says the latest cash injection will help the company invest only the team in the london headquarters what's interesting is it's not the first time amazon ventures into this space. they entered a uk food delivery service a few years ago. they thought the best way to develop it was by acquiring a stake in a company rather than trying to replicate the wheel by itself which is interesting. >> it is >> there are reports they attempted to fully buyout deliveroo. that was reported by bbc earlier today, but it appears they acquired a stake we don't know exactly what the stake is going to be just amazon will have a leading role in the funding. >> it's interesting to see how investors will react to that in the european stocks they compete with all of them seeing it as bad
news because that cash in theory will help them take on more market share you see some of the major european stocks. and of course, you know, this is an area where to expand costs a huge amount of money they've been facing some really difficulties just with the way they interact with their contractors. it's yet another example of a complex equation for firms to solve. what they said in the press release this morning is that is an area they'd like to invest more money in pay and flexible working conditions >> it's interesting. you raise a couple of good points there obviously as i mentioned, we started off discussing that this is their venture into the uk they don't have a venture yet in the u.s. this probably opens the door to the expansion into the u.s. if it goes well in a relatively smaller economy that opens the door to some of the companies there. or even because some of the
funding from this round of funding for deliveroo is going towards their national expansion, we may well see deliveroo moving into the u.s. of course uber just had their ipo. one of the sweet spots of uber is it isn't just a l travel company. they have uber eats. now amazon is taking them on as well more bad news from a competition perspective from uber. another story that involves competition between one very well known established u.s. rival and an upstart elsewhere is the chinese coffee chain that wants to take on starbucks that's luckin. it's priced at $17 a share at the top end of the range with that price range, the offering would generate around $570 million the 2-year-old company already operates more than 2300 stores and says it intends to double that number this year. it will list under the ticket lk
on the nasdaq today. that's interesting both those firms looking to raise $570 million seems to be the amount of money to expand. >> it's a question whether they serve any ice lattes >> key our colleagues will speak to the cfo of luckin at 12:50 central european time today. switching to the luxury sector richemont. sales for the fiscal year rose 27% thanks to the jewelry and watch brands but the latest export dates that shows weak demand in its key u.s. and hong kong markets richemont numbers are down today. it was a beloved sector for the most part of the year. with things turning in china,
that's having an effect. we are seeing it in earnings richemont citing weaker sales out of hong kong today let's look at the broader luxury sector dragging on everything carrying the gucci owners down 0.7%. burberry in the uk down about 0.3% a lot of red in the luxury sector today easy jet has posted a narrower than expected first laugh lost but revenue will remain in the first half of the year warns of a pretax loss of 272 million pounds the competitive environment has proved to be a head wind for the company. >> when you look at the customers we had booked for the summer, we booked on more than the last year. what you see when you're looking at them are you're right we're behind some 3% in quarter three, but it was also very different competitive
environment. if you remember, we have monarch administration so the competitive environment last year was what carried into the q3 but all in all, the numbers are clear that 3% more customers booked through us this summer. but there is an effect on the pricing environment because it is tougher out there there's no doubt thabt >> and speaking to the traffic sector, thomas cook shares are falling due -- after the company issued its third profit warning in less than a year. m m also warned of a difficult trading environment heading into the summer we've had a bunch of earnings come out this morning. let's get into this with head of
quantitative strategy research lots of things to unpack as i was recounting the market activity for the week. what strikes me is despite the noise, european markets are still positive for this week >> they are. despite a weak start to the earnings season, actually, we're finding that overall the amount of earnings are coming up pretty much in line with analyst expectations so we've got the auto sector being a bit weak but that's being offset by stronger health care earnings and coming out pretty much about 1.4% compared to expectations overall. >> so not as bad as people have been expecting but we are beginning to see a few warning signs. richemont is a good example of that in the luxury space today they warned of slowing demands out of their key markets u.s. and hong kong. hong kong being the imperative
one here with everything going on within china and the knock-on effects that the slowdown is having on consumption. do you worry about the trajectory of the luxury sector from here within europe and also its obvious linkages with what's happening between u.s. and china on the trade war front >> to us the luxury sector is asian exposure and what we're seeing is that international stops are being hit quite badly by the weakness in some of these demands if we look, there is a big difference in the u.s. between the domestically orientated stocks in the way you're looking at stocks outside the luxury sector, when you talk about exposure to asia, we heard a lot of these earnings companies say we're seeing slowdown in our asian market how do firms and investors looking at those firms think
forward beyond a potential resolution to this trade dispute in terms of deciding where they're going to invest their money? >> i think what we see is that asia still has got concerns for us when you look overall at the asian market, it's commodity orientated so some of those aspects probably will still come through. so we're not positive long-term about the asian market relative to some of the u.s. market where we've got much better profitability of companies and much better deference in a way >> we'll pick up the conversation in the second half. all right. i.m. pei died at 102 years old. pei's designs are remembered for
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welcome back to "street signs. well, let's talk brexit. theresa may says she'll lay out a plan for her resignation of her vote in june she met with senior conservative party lawmakers late thursday and promised them she would provide a timeline from downing street after that vote whether or not it passes now, the chairman of the party's ordinary lawmakers, the 1922 committee, confirmed when the time comes he would meet with may to discuss the election of a new conservative leader. >> wo could that be? boris johnson has confirmed he would compete to replace may in that role as conservative party leader the brexit campaigner said, quote, of course i'm going to go for it >> surprising one, that one.
brexit talks between the conservatives and the opposition labour party reportedly are going to collapse. they would move to a second phase in agreeing on a process for parliamentary votes. and a lot of activity going on in the political backdrop with the uk the past couple of sessions it's been mostly expressed, though, in downside trades in sterling we started off the week at 130 we dropped a full two points since then now have broken through 1.28 a bit of a drop this week. especially when you see so many political hurdles to get over through the next months including the european elections next week. >> yes we should add, of course, we don't know whether those talks are happening. that is a bbc source giving us that information cnbc has not been able to confirm it it seems to have made an impact on action last nagt. now, the peoples's daily said a
trade war with the united states will only make china stronger. meanwhile the tensions in washington have weigh odden the country's economy. but the reform commission in beijing said the impact of tariffs was, quote, controllable it also announced its intention to introduce countermeasures as and when deemed necessary. do you think that investors and analysts have missed a trick when it comes to these and where they're geographically exsupposed what it meant to be selling overseas including to china or to u.s. consumers who seem to be doing relatively well. >> i think you're right, but maybe analysts got too optimistic about international exposure at the start of this year when we looked at the results
that companies with high international exposures reported, then they were coming in around 6% below analyst forecasts. so analysts were definitely optimistic whereas those wuch were domestically orientated were coming in above expectations points to a lot more strength in the u.s. domestic economy than maybe people were expecting. >> i mane, just to put that another way, if people are going around looking for opportunities and we've got a lot of people coming on the show saying the market is super expensive, et cetera then surely one way to get a good investment now would be to buy those stocks with international exposure or with exposure to china. i mane, the baseline assumption is still that we will get some form of a trade deal between the u.s. and china clearly it's imperative for them both at this point despite the strong words do you think that as a constructive way of expressing that view, you are better off
buying exposure to those international stocks >> i think that we've got the problem about weaker earnings momentum sitting there but for valuation of these stocks are not significantly different. they're not attractive enough for us to be recommending the exposure to those companies. >> conversely from a defensive perspective, are there -- is there an easy ruleof thumb, essentially, when it comes to picking stocks that might in your view remain a little more untroubled as this trade dispute rumbles on >> well, we think where investors should be is at the quality end of the spectrum. if you're picking companies which have got high profitability based on measures like r.o.e., good cash flow, then those are preferable in this environment our overall view is that the macro environment remains difficult. we think that liquidity is going
to be -- remain constrained. so we're cautious overall on the equity market. we're cautious overall on risk assets and so we see that the quality companies provide the best protection and also their strong profitability manes they have the characteristics that investors have benefitted from >> speaking of growth characteristics, we've had two very high profile ipos in the transportation space, uber and lyft both of those stocks have really struggled since inception. compare that to the others say the lakes of pinterest what is this recent batch of ipos and tech space tell you about appetite for those names and consequently the secondary performance? what does that tell you as well? >> i think there's a big difference between companies like lyft and uber compared to some of the quality companies that we've been recommending because these ipo companies are
loss making. they don't have the profitability that we think provides a buffer for investors. and what we think is that the reason these ipos are away is because you got a high level of share buybacks which is putting money into investors' hands they need to reinvest them somehow. if you're a passive investor, it's simple. you buy the rest of the market but if you're an active investor, they are now looking at some of these growth opportunities and not being so careful about the profitability of them. >> it's the fomo trading fear of missing out. >> exactly >> thanks very much for joinings u. that was charles cara. also coming up on the show, not a pretty picture pinterest shares fall in extended hours trade after the social media site posts a wider than expected net loss (client's voice) remember that degree you got in taxation?
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thaez are your headlines >> european stocks fall as banks and autos sink the dow is on pace for its first four-week losing streak in na nearly three years and the dutch finance minister tells cnbc no one will win in a trade war. >> it is very important to make sure we avoid any type of trade wars for the simple reason that it is lose/lose. it is in the interest of the european union, but all of the other economic blocs around this globe to make sure that we keep pushing multilateralism. british low cost airline easy jet has a wider first half loss and it's warning that brexit uncertainty could soften revenues >> the competitive environment last year was very benign. and that carried into the q3 3% more customers booked through us this summer, but there is an effect on the pricing
environment because it is tougher out there. there's no doubt about that. >> the shine comes off richemont after the luxury giant misses expectations despite a big one after o after -- one-off gain. and a fresh investment in deliveroo, amazon investing $570 million in the uk broup. it is not boding well for the european indices this morning. you can see the picture behind me is pretty negative as well. ftse 100 down about half a percentage point been focused on brexit developments there but it has been reported or confirmed that the prime minister will be setting out a
departure date for her term in office that is ahead or after that -- that vote is expected to happen the first week of june a lot of flash points to watch out for when it comes to the uk political developments dax down 0.75% today bmw down 6%. that stock is trading ex-dividends generally speaking the auto sector continues to underperform this despite reports that the tariff deadline between the two stieds in the u.s. and europe will be postponed by another six months cac down a percentage point. again, more scrutiny as we head into the european elections as the populous continues to gain grounds and some remarks out of the prime minister yesterday saying that the composition of the eu will change in the next
couple of months so they're not worried about their public finances. the bund market tells something different. switching to foreign exchange, euro trading flattish. not a lot of move there. we get the final cpi numbers coming up in half an hour's time again, as we spoke about in the preliminary reading, we're expecting to see an uptick in inflation and down tick on core inflation. 0.9% that is still far from the ecb's target of 2% dollar/yen hanging in around 109.60 and then as i was talking about earlier, we've seen a double digit decline in this currency pair over the last couple of sessions on sunday evening, the currency was trading up at 1.30 given a lot of the strength back we broke through 1.28 yesterday. weakness in the pound this week
given all of the questions about where these discussions are going, what is going to happen the future between uk and the eu but let's take a quick look at u.s. futures and see how the mood is over there not so pretty either we've got s&p, dow, and nasdaq all opening up to negative territory. nasdaq as well all eyes on the tech sector. this after tech got a bit of a beating in the chinese market overnight. tech in the u.s. also under scrutiny not just because of the trade war but also poor performance of the ipos that have come to market in the last couple of weeks. well, eu commissioner moscovici says it's in italy's interest to keep debt under control. should have an incredible fiscal policy the prime minister said his government will spend, quote, everything there is to spend
until unemployment is halved he added the fiscal regulations are, quote, impoverishing the continent. our colleague sylvia morrow is in brussels. what's been the reaction to those comments despite what we've heard there from mr. moscovici? >> they have started their day of meetings here in brussels they say italy needs to follow the fiscal rules despite the comments made earlier this week. now, i have to say i spoke we the uaustrian finance minister. he will seek to have a meeting with the italian finance minister to tell him to remind him how important it is to follow the fiscal rules. >> what we heard in the discussion for a long time now is we have to focus also that italy is running the rules and if we have rules in the
eurozone, everyone is asked and demanded to fulfill the rules. yes, last weak mr. solvini said okay the rules are not in line with the italian ideas and so out of this we have, i think, the strict order to declare the rules also for italy. >> you would not be open to change the fiscal rules? >> no. >> did you say anything to your counterpart from italy yesterday regarding this subject >> so, we did not have the chance yesterday today i think it will be the chance for bilateral talks out of this. he's an expert in economics. so i think he really knows what it is about. so i think it's an internal discussion in italy necessary to clear up in which form the position is really done. and i also think the commission will be asked and demanded in june to be ready for a clear answer to what is discussed in italy now. >> do you think that the european commission has any
power regarding the italian finance at this stage given that the executive is leaving in october? >> what i see is the commission, we had a long discussion about the draft plans from italy 2019. and what we see now is there is a pressure on it but what i demand is that there should be also the measures in italy and there should not be the pressure on the eurozone and this is what we have to bring back in the discussion and the rules have to be fulfilled. >> one final question on trade president trump has until midnight tonight, washington time, that is, to decide whether to impose on europe. it's expected that he might delay this decision. are you happy about a potential delay on the tariffs >> yes i think it's a good solution if we have more time in the discussion and for europe it is important and also the global basis that there are no bad things going on
with an increase it does not make sense because being fair on the world is also important and in line wimp is what with is doing on global trade. >> so we heard from the austrian finance minister there earlier i had spoken with the dutch finance minister and he sounded a bit more skeptical this time around to make any strong remarks on italy perhaps because we have european elections next week. >> and sylvia, obviously great job in asking all of those questions. there's so much going on in europe with the european elections coming up next week. but the other big focus on the markets has been trade the trade discussions between china and the u.s. and expectations that there may be additional tariffs being imposed on european autos as well. you spoke to many finance ministers over the last 24 hours. what did they have to say about the prospect of the european
autos and the anticipation ahead of the u.s. decision on that front? >> well, they certainly sounded happy about the potential delay on imposing these tariffs. i have to say that all finance ministers warned about the potential economic impacts on the eu and also the u.s. if these tariffs go ahead the majority of the european countries want to negotiate with the u.s. to avoid this conflict of tariffs but some of the ministers did say they are skeptical about whether or not -- about whether they will reach an agreement while president trump is still at the white house so let's see how those trade tensions will play out in the coming hours >> thank you for bringing us the latest from brussels there such an interesting couple weeks coming up in europe. all right. switching to the tech sector pinterest shares plunged after
they posted a wider than expected net loss in the first earnings report since going public in april. the company also saw monthly active yaac active user growth slow. but full year revenue would meet expectations with the ceo adding he was encouraged by the firm's u.s. sales coming up later, our u.s. colleagues will speak with pinterest ceo ben silbermann at midnight cet if you have nothing better to do on your friday night let's get out to another big tech conference and our own karen who joins us live covering many different topics. karen in. >> thank you very much we've been talking about the skill set required for the future, what the workforce will look like with all of these different technologies we've been talking about ai, the internet of things, big data, cloud computing. one of the big fears is that
people will simply not have jobs in future. but the evidence now is that employers are actually still hiring more people but those needs are changing would you believe even at nasa in the space industry it's not just been the smartest person in the room having the best iq that counts anymore you actually have to communicate it so thit's changing across what' called lq. learnability, learning new skill sets we have so many different trends when you think about the conversation of a couple years ago, the demand was for ap dwpers now those demands are ai specialists, sicybersecurity, internet of things specialists so about what really want employers to think about at the forefront of hiring now. take a listen. >> when you look at how quickly technology is changing, you know, it's very hard to pick a point in time and say these are
the skills i need. because 18 to 24 months from now you're going to have a different view because things are changing so a lot of work that the organizations need to do is to really change the cultural learnability so this cultural asset continues learning to ensure that the people in the workforce you have are always up to date and follow we the evolution of a company as it adapts and transforms. >> lq. so we're seeing the wake of iq to lq. tell us about the difference >> well, iq started as a hiring criteria for the u.s. government during the second world war. lots of data about people whether they were certain soldiers or not. so you could measure, you know, their level of iq and the government then started to dock this as a hiring criteria for government service pretty quickly, though, depending on government service,
they figured out that hires on iq was not a good predictor of workforce performance in the long run it was an essential component for some jobs, but what they needed to also think about, the soft skills. that's when we moved into eq so the combination of cognitive ability and interpersonal skills and communication skills and things like that we think the next evolution of this is going to be lq the learnability culture now you add lq, eq, and the person's interest in aptitude to keep on learn iing as they are engaging in the workforce. >> what does this mean in practice if you're an employee and going through a recruitment process in future, you might have to pass a different test not just what type of character you are, but how quickly you can learn and acquire new skills for the employer, what it means is you're going to have to build the workforce of the future. what we have seen is a hiring
and firing strategy. to acquire the right people for workforce. but now with record low unemployment rates and the lack of certain skills particularly in technology, you can't embark upon that strategy the employer is going to have to work on more training in their skill set. you might have to put a layer on top around technology just to be ready for some of the changes coming so i think that's how you sort of interpret where we're going on the employment front. i think it is encouraging especially for journalists as we are a quick study on many subjects >> thank you for bringing us that review. many transformational things going on every year. >> coming up in the show, brooks koepka will be defending his title at the pga championship. we'll get an update from adam reed after this break. ♪
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approved the giant's $200 million joint venture investment the rusal will provide for the plant in kentucky which will provide product for the u.s. auto industry. sanctions were lifted on rusal and its parent company in january. the executive chairman of air plus told our colleague that sanctions have been unexpectedly positive for the firm. >> a lot of our customers and stake holders are keen to work with us now that we have a world class board, that we have unprecedented transparency, corporate governance the actual actions we had to take to remove sanctions actually make our company more investable and they actually increase the opportunities for us to forge new international partnerships so we're optimistic about the future and actually the steps that we took to make the company what it is now today
all helps us achieve our long-term goals. >> she also asked the chairman and ceo of brady industries that he was confident rusal would stay off the list. >> they touch 18% of the global supply chain of aluminum this is a fantastic low carbon company. in the united states when they were sanctioned, many american companies needed rusal they applied for waivers to sanctions. and they all received them so rusal is welcome in the united states zplie chain and in fact, needed as they are in the european supply chain we are right in the middle of formula 1 season. we head to monaco where niko
ro rosberg has taken us on a tour of his hometown. my colleague has it all. >> nico, you've got a young family here. what sort of places do you like to take them to? >> right here. >> really? >> right here. this is where i roller blade with my daughter this is where we play on the beach. so we're right in the spot so my school is right about the formula 1 area so everybody was there and then they would walk with their cars up to the starting grid. >> that's amazing. >> it was just incredible memories and dreaming, like, wow. i wish i could be like them one day and be there one day myself. >> you can catch the full episode over the weekend it's playing at 6:00 p.m. central european time on saturday then of course the monaco grand prix is the following weekend well, the second golf major of the year, it's underway at the pga championship
brooks koepka has grabbed headlines and the lead overnight at the bethpage black course you may asking what happened to tiger woods? >> what happened to tiger woods? >> he's struggled in this first round. >> oh, no. riding on the high of the masters. >> and yet i don't want to rule him out. should we? >> absolutely not. not at this stage. but it's hard to look anywhere else than brooks koepka at the moment he's the defending champion at this tournament. he's holder of the two major titles at the moment and he was very much in fine form yesterday in his opening round. playing with molinari and tiger woods. the holders of the other major titles in golf at the moment he left them far behind him, shall we say brooks was in fine form. this shot was one of the
highlights >> someone who's not quite at the top of the leaderboard but i want to ask you about john daly he's a man i grew up watching as a golfer always a colorful character. yet he seems to be embroiled in a bit of a mini scandal. why is that? >> john daly won two major titles a former pga championship winner gets invited back to play. he's in his 50s now. but he's got a knee problem and he's been given special exemption at this tournament by the organizers to go around at least the opening two rounds depending on whether he makes the cut or not in a golf cart. so uncharacteristic to see a major championship it does happen on the champions tour there he is. you may notice his one hand on the steering wheel and a cigarette in his hand as well. >> so he's driving around -- let's just ignore the colorful
pants for one second he's driving around in a golf cart with a cigarette in one hand how is that even allowed >> it's not uncommon for players to smoke on the course. >> how is that allowed in this day and age? can you imagine any sport -- >> for they're athletes. they're athletes i'll fight on that one i think dartists are athletes as well but i think they can smoke maybe outside of there >> i remember that growing up in the '80s steven henry >> it's not a lifestyle thing necessarily but it's a change in mentality, i suppose tiger woods revolutionized the way golf was looked at >> and actually working on it being healthy. >> john daly was very much a star to do things a bit his own way. >> just going back to golf rules, you're allowed to go around with a golf cart so long
you have an injury >> they've given exemption on this tournament. champions tour rules dictate that but this is a special exemption. some are saying it's harder to go around in a golf cart there's specifically places you can't go so whether or not it's in the spirit of the game necessarily because he may be taking the place of an able-bodied alternate. he was an alternate when he won the pga championship in 1991 but he's a former champion and those are the rules allowed of him. >> former champion with a very long drive from what i remember. speaking of people with long drives, let's talk more about brooks koepka. he is at top the leaderboard after day one. what's the reaction been to the fact that he's back there and what are his rivals saying >> tiger woods said he could have actually got a lower score than 7 under
it was a brilliant round by brooks tiger got to see it first hand they're impressed with what he's been doing it's been impressed by what he's been doing for the past 18 months really. because he has won these three major titles in such a short space of time. and that's the kind of golfer that we're looking for at the moment who's going to be the guy to start being this legacy golfer it's actually been nearly five years since rory won his back-to-back majors in 2014. >> excellent adam, will you take a golf buggy back to your desk? stay with cnbc karen will be speaking to accorhotels ceo. we'll be back in a few minutes the latest innovation from xfinity
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